LABOUR called for a public inquiry yesterday after evidence showed government interference in the Royal Bank of Scotland’s (RBS) Global Restructuring Group (GRG).

Evidence produced in a court case show that the Treasury’s asset protection agency influenced GRG’s strategy.

The agency ceased operations in October 2012.

Separate court evidence suggested that the agency told RBS to stop customer support, when the bank did not want to.

This led to a direct impact on the owners of over 16,000 small businesses who were in the GRG.

As a result of these decisions, many of these business owners lost their businesses as well as their physical and mental health.

Labour shadow Treasury secretary Jonathan Reynolds said the papers “reveal the government may have intervened improperly in a way that damaged small businesses and caused widespread misery for both workers and employers.

“There is a strong will in Parliament to see this happen — it is only the government who are dragging their feet.”